U.S. Pushes for Stake in Russia's Prospective Energy Pipeline

[papau]

http://ap.tbo.com/ap/breaking/MGAAT97U0LD.html
Sep 25, 2003
U.S. Pushes for Stake in Russia's Prospective Energy Pipeline
By Vladimir Isachenkov Associated Press Writer

MOSCOW (AP) - Commerce Secretary Don Evans said Thursday that he had urged Russia's state pipeline operator to offer American companies a share in a new Arctic pipeline project intended to bolster energy exports to the United States.Russia hopes to win greater access to the U.S. energy market by developing a new export route via its ice-free deep-water port of Murmansk, which would allow supertankers to economically take oil to the U.S. East Coast.

However, funding for the project depends on Moscow's readiness to allow private companies to share ownership in the new pipeline. The Russian government has traditionally insisted on ownership and operator rights for all energy export pipelines, viewing it as a key lever for regulating the supply of oil and gas to global markets and ensuring a proper tax collection from the oil companies.Evans said that during his five-day trip to Russia he talked with the chief executive of Russia's state pipeline operator AO Transneft about letting U.S. companies play a role in the prospective Murmansk pipeline.
"I just encouraged him that I thought it would be a good thing to open that up to a competitive process," Evans told reporters Thursday. He said that Transneft hadn't yet decided how to handle the pipeline project, but U.S. participation "certainly hasn't been ruled out." <snip>

... Russia's economy will again grow 5.9 percent this year.
However, U.S. businessmen say that Russia still needs to improve its licensing and natural-resource laws before foreign oil companies will step up their investment activity.

[jamesinca]

1. They ain't getting the Iraq oil, better move in on Russia

I bet Reagan is just sick knowing we are doing business with those commie pinko types.

[htuttle]

2. There's an interesting line there

"... Russia's economy will again grow 5.9 percent this year. "

I looked on a chart showing real GDP growth for the US going back to 1973. The highest it got in that time was 4.4% in 1997. Putin's re-election chances in 2004 (he's also up for election) are certainly looking a lot better than Bush's.

Parenthetically speaking, China's GDP growth has also been very high lately. They have been up around 9-11% this year.

As for whether the Russians will allow US companies to get involved, this quote says it all:

The Russian government has traditionally insisted on ownership and operator rights for all energy export pipelines, viewing it as a key lever for regulating the supply of oil and gas to global markets and ensuring a proper tax collection from the oil companies.

There's NO WAY they are going to give that up. One of Putin's personal peeves seems to be private business concerns running off with Russian state assets (cf. his ongoing crackdown on the profiteers who'd grabbed up state assets after the fall of the Soviet Union).

I also remember a quote from a Russian oil minister shortly before/during the initial invasion of Afghanistan. It was something like, "US oil companies will have to realize that we aren't a third world country who's natural resources can be exploited unfairly," or something to that effect. Now that the balance of geo-political power has shifted to further strengthen Russia's hand, I don't see that opinion changing.